Several measures were very recently adopted (for some, they existed already and were simply extended) by the Belgian legislator through its Law dd. 2 April 2021 on temporary support measures in the light of the COVID-19 pandemic.
Among these measures, an incentive is made available to Belgian taxpayers with respect to real estate (including Belgian companies who benefit from a favourable corporate income tax regime). The objective is clear : to encourage Belgian real estate owners to grant rent free period(s) to their lessees (waive of their payment obligation) and thereby support the enterprises (as lessees) that were obliged to close their doors in attempts to control the further spread of the virus (in line with the sanitary measures imposed by the Belgian government on 12 March 2020 onwards).
For companies, this incentive takes the form of a tax credit for an amount corresponding to 30% of (part of) the rent (and other rent incentives) for which the payment obligation is waived.
This tax credit is subject to several conditions, which most important are the following:
- The building with respect to which the rent free period is granted is located in Belgium;
- The building must be allocated to the lessee’ professional activity;
- The tenant must still be active;
- The tenant must be a private individual or a small or medium sized company;
- The lessor and lessee must not be related parties;
- The rent free period must cover March, April or May 2021 (or several of these months);
- The rent free period must represent at least 40% of the rent and other rent incentives.
In any case, the amount of rent (and other rent incentives) on the basis of which the tax credit will be determined cannot exceed a double threshold. It will more particularly be limited to an amount of € 5,000 per month per rental agreement, and to an amount of € 45,000 per Belgian taxpayer (all rental agreements included).
30% of the resulting amount will be available as a tax credit in the hands of the taxpayer (i.e. decrease of the corporate income tax due). Unused tax credit (if any) cannot be reimbursed if not used.
Some formalities need to be fulfilled by the taxpayer who wants to benefit from this measure, essentially the conclusion of a written agreement whereby the lessor waives the payment obligation of the lessee and its filing with the Belgian tax authorities before 15 July 2021. Other practical guidelines have not (yet) been provided.